Looper arbitration decision could impact Fuentes

In recent days, two of the most talked about subjects surrounding the St. Louis Cardinals have been the cases of free agent closer Brian Fuentes and starting pitcher Braden Looper – one potentially coming into town with the other likely leaving.

In what follows, I will explain how these two seemingly-isolated cases are anything but.

Aftershocks of the decision to not offer Looper arbitration include either the Cardinals not signing any Type A free agents such as Fuentes or gutting the early part of their 2009 draft. There is also a significant financial ramification that may or may not impact the organization’s Latin American program.

Looper and Fuentes

Losing Looper

Though the Looper decision was not assumed prior to the December 1 deadline, many observers, including me, expected the Cards would offer him. Yet, Looper was probably pleased to be cut loose. Seeing Kyle Lohse snare a four-year deal worth $41 million likely helped Braden realize some time ago that his chance to score a similar multi-year contract would not be with St. Louis.

Chris Carpenter, Adam Wainwright and now Lohse have long-term contracts, with Todd Wellemeyer coming up for consideration in 12 months. That is potentially too many starters tied up for too long, leaving Looper on the outside looking in.

Despite concerns about the economic downturn everywhere, Looper seemed assured of getting a better deal somewhere other than a one-year, arbitration-driven deal with the Cardinals. As a result, it was generally expected that the shaky closer-turned solid starter would have turned down the opportunity for a one-year deal with the Cards via arbitration.

The Cardinals didn’t care about expectations. They were apparently worried that Looper might accept despite the seemingly low risk of its occurrence. Therefore, they took the only route to absolutely assure that wouldn’t happen – they cut their formal ties with the pitcher.

With no guarantee that injured ace Carpenter will be ready to go to start next season and how many innings they will get from him, the Cardinals seem to be in the market for some insurance for their starting rotation. Their top five are currently Carpenter, Wainwright, Lohse, Wellemeyer and Joel Pineiro.

If the organization does want that insurance, it seemingly won’t be delivered via Looper, unless the two sides come back around to each other later in the off-season.

Extra pick lost

Though I believe the Cardinals were unnecessarily cautious in this situation, I am frankly less concerned about keeping Looper than I am about the downstream ramifications of the decision.

As a Type B free agent, had Looper been offered but not accepted, the Cardinals would have received a compensatory draft pick commonly called a “sandwich” pick that can be used between the first and second rounds of the June, 2009 draft.

Since the Cardinals did not make that offer to Looper (or Jason Isringhausen or Russ Springer), they were not awarded that selection.

A change in plans?

From an organization that has highly-prioritized the long-term mission of building their farm system, bypassing the likely compensatory pick for Looper seems a surprisingly counter-strategic decision.

If fact, 2009 will be the first time since 2004, before Jeff Luhnow assumed the role of farm director for the Cardinals, that they will have no extra picks coming into the draft.

Perhaps anticipating this kind of move, not ninety days ago, I asked Luhnow if the Cardinals could ever have too many compensatory picks.

“No, absolutely not. Those picks are valuable and you just have to figure out how to turn those assets into something that you need. I am speaking as the scouting director now, but even speaking with my global hat on, we like those draft picks and will take as many as we can get,” Luhnow declared.

Fear of being locked into arbitration with their compensation-eligible free agents clearly altered the organization’s intent this year.

Yet, the Cardinals are not unique. Along with St. Louis, at least ten other clubs, perhaps concerned about the economy, excluded all their six-year-plus veteran free agents from arbitration offers.

No sandwiches would leave system hungrier

To provide a reminder of the quality of players that have joined the Cardinals as supplemental picks, I offer their most recent sandwich round selections, with the bonus amounts awarded each:

2008: Lance Lynn – $938,000

2007: Clayton Mortensen – $650,000

2006: Chris Perez – $800,000

2005: Mark McCormick – $800,000 and Tyler Herron – $650,000

All in all, would the Cards rather have these players than not? It would certainly seem like it.

Though the jury is still out on the 2005 and 2008 sandwich players, the major league club already began reaping the benefits of Perez less than two years after he was pitching in the College World Series. Mortensen is also on the fact track to the big leagues, starting in Triple-A before he had even one full year of professional experience.

A misdirection play being run?

As they pump more money into their growing Latin American operations, could the Cardinals be changing their strategy by passing up comp picks, while routing more money away from the June draft in the process?

Think of it this way. Had the Cardinals landed 16-year-old Venezuelan centerfielder Yorman Rodriguez in August instead of former GM Walt Jocketty’s Cincinnati Reds, by my calculations, the Cards would have spent more 2008 bonus money overseas than they did in the regular First-Year Player Draft. The Reds reportedly dished out $2.7 million to Rodriguez, a record for a Venezuelan-born player.

Furthermore, consider the Cardinals’ top 2008 international signing, Roberto De La Cruz. The third baseman received more in bonus than any other Cards player taken in this June’s First-Year Player Draft not named Brett Wallace, a polished college hitter five years older than he. In fact, the Dominican Republic native fetched the same bonus as the number 29 pick in the first round!

Since at least 2005 and probably much longer, only Wallace and Pete Kozma (2007) received more in bonus from the club than did De La Cruz. Among the recent first-rounders who brought home less than the third baseman are Adam Ottavino (2006) and Colby Rasmus (2005).

That is uncharted territory for an organization that didn’t even have an international presence outside of the Dominican Republic just a few short years ago.

Increasing confidence in growing overseas budget

I asked the Vice President of Amateur Scouting and Player Development about the significance of the escalation of the Cardinals’ international spending on players and whether my estimate of their shifting balance toward a majority spent in Latin America and a minority in the US is accurate.

“Correct. There are a couple of clubs teetering on that edge and a couple that have already gone over (spending more outside the US). We wouldn’t be afraid to do that.

“I think Mr. DeWitt and Mo now have the confidence that we have the right scouting resources in place and the right infrastructure in place that it makes sense to deploy the bonus dollars there and wait for the return. It is a bit more of a long term investment, so you have to look at the whole portfolio,” Luhnow explained.

Type A free agent signing carries big downside

The final ramification of not having that supplemental selection is that the Cardinals may be more reluctant to sign Fuentes or any other of one of the top free agents, called Type A, this despite the club needing help at several positions at the major league level.

Examples of Type A players offered arbitration that might previously have been on the Cardinals shopping list include:

Infielders Orlando Hudson and Orlando Cabrera

Left-handed relievers Fuentes and Darren Oliver (AA*)

Starting pitchers A.J. Burnett (SS**), Derek Lowe and Oliver Perez

Outfielders Raul Ibanez (SS**) and Milton Bradley

* arbitration offered

** signed since

(The above list excludes high-end Type A’s that were in the same situation but likely priced outside the Cardinals budget, players such as C.C. Sabathia, Ben Sheets, Manny Ramirez, Mark Teixeira and Francisco Rodriguez. (Yeah, I heard the rumors about an offer to K-Rod, but I don’t believe them.)

The Looper situation indirectly suggested that the remainng Type A players have an uphill chance of becoming Cardinals in 2009. Either the players accepted the offer of arbitration, as did Oliver, taking them off the market by tying them to their old clubs, or if they declined, compensation from the signing organization will be required. As an aside, of the 25 players offered this year, only Oliver and Cincinnati’s David Weathers accepted.

If the Cardinals do go ahead and sign any Type A, it would seem their plan to focus on improving the farm system via the First-Year Player Draft would be taking a one-year hiatus as a result.

Again, here’s why. If a Type A signing is made, the Cardinals would forfeit their first round pick for next June.

Is signing a Type A worse than not?

We’ve already seen why the Cards will have no supplemental pick in 2009. Add to that the potential loss of their first-rounder in this scenario and the chances of the organization nabbing an impact player in the 2009 draft will be greatly diminished.

Though the specifics of the supplemental round are not yet defined, I currently estimate the Cardinals’ second-round pick should be somewhere between 65th and 70th. That would be their very first selection in the 2009 draft in this case.

Not pretty, nor is it a normal situation for the Cardinals.

In fact, the last year the Cards went into a June draft without either a first-rounder or a supplemental first-round pick was way back in 2002. That was due to the club having signed Type A free agents Isringhausen and Tino Martinez during the previous off-season.

The 2002 scenario could repeat this year if the Cards signed two Type As such as Fuentes and Perez. Losing both their first and second-round picks would ensue.

Rewriting history isn’t pretty

In a world where the Cards would have no first or sandwich round picks, their top selections in recent drafts would have been the following players. They represent the organization’s initial second-round picks in these years:

2008: Shane Peterson

2007: David Kopp

2006: Brad Furnish

2005: Josh Wilson (retired)

Nothing against any of these young men, but would anyone feel as good as they do about the much-ballyhooed improvement in the Cardinals system had these players been the organization’s highest picks in the last four drafts?

Methinks not.

Money potentially saved

If one subscribes to this action being a part of an expense-adjustment strategy on the part of the Cardinals, consider this. The organization could avoid spending as much as $2 million next June just by not having to bonus both a first-round and a sandwich pick.

Another potential factor is sheer roster space to put all their players. While the Cardinals’ system is the youngest of the 30 organizations in aggregate, it is reaching its capacity, says Luhnow.

With fewer minor league free agents and better quality players, it is becoming more difficult to determine who should be pruned from the system. As a result, fewer can enter.

Here is Luhnow’s recent observation.

“I look at next year’s draft and look at all the players in our system and I am not sure we are going to need to sign as many as we did this year. I said that this year, too, so we will have to see,” the farm director explained.

There are several potential ways to achieve financial benefits. For example, they could shave off the high-end picks as discussed here, they could draft more players with signability issues, and/or they could refuse to pay over slot value for any draftees.

In conclusion

The Cardinals’ decision to not offer Braden Looper arbitration either eliminates their signing of a Type A free agent or dooms them to waiting and waiting to make their first 2009 draft selection until the 65-70 range.

There is a possibility that the club could divert unspent bonus money into their Latin American signing budget, but that is not assured.